UK company, Directors loan, ways to pay back legally?

[UAETrader454]

Hello, I am the director of a company in the UK, I took a directors loan out last year and I am now due to pay it back within 30 days, but I don't have it as cash, all my cash is tied up in assets.

Am i able to legally sign over some NFTs that are worth the equivalent amount to the company in order to pay back the loan?

Is this legal?

The purchase price for the NFTs is recorded on the blockchain and will be enough to cover he loan value.

If this is possible what is the best way to do it?

Thank you

 

[wellington]

Lol, you bought NFT's with corporate director(s) loans lol.

Your NFT's are worth what someone would pay for them, there would be laws in respect of this otherwise we'd all be taking pictures of our s**t and using that to repay funds we've 'loaned/embezzled' out of the company.

 

[Sols]

Speak with a UK attorney about this. You've probably created quite a mess for yourself. Expect to have to pay the loan back in cash. But depending on the full circumstances, you might be able to buy yourself some more time to come up with the money.

It's very unlikely that you would be able to pay the loan back in the form of some pixel art. After all, the N and F in NFT stand for Non-Fungible.

 

[uplana]

Do you live in the UK op ?

 

[UAETrader454]

Lol, you bought NFT's with corporate director(s) loans lol.

Your NFT's are worth what someone would pay for them, there would be laws in respect of this otherwise we'd all be taking pictures of our s**t and using that to repay funds we've 'loaned/embezzled' out of the company.

No, Of course not lol.

Its currently legal to pay back a directors loan using assets, I have NFTS which are assets, so I am wondering If i can squash the debt by transferring ownership of these to the company

Do you live in the UK op ?

Yes currently, but i also have Dubai residency and I am planning to live there shortly.

Speak with a UK attorney about this. You've probably created quite a mess for yourself. Expect to have to pay the loan back in cash. But depending on the full circumstances, you might be able to buy yourself some more time to come up with the money.

It's very unlikely that you would be able to pay the loan back in the form of some pixel art. After all, the N and F in NFT stand for Non-Fungible.

Directors loans do not have to be paid back in cash, they can also be paid back in assets.
Non fungible means unique and not able to be replaced, NFTs use blockchain technology to provide a public proof of ownership, therefore the sale value is recorded publicly and the asset can be transferred to the company to repay the debt just like any other asset can as far as I am aware?

 

[uplana]

If you relocate to Dubai and don't plan to come back any time soon I would simple sign off as an director and let the company go, don't do any accounting and for sure no annual report, so they will sooner or later dissolve the company and you are good to go.

 

[Sols]

Directors loans do not have to be paid back in cash, they can also be paid back in assets.

In that case, you need to seek legal advice as to whether an NFT is considered an asset in this particular case.

Non fungible means unique and not able to be replaced, NFTs use blockchain technology to provide a public proof of ownership, therefore the sale value is recorded publicly and the asset can be transferred to the company to repay the debt just like any other asset can as far as I am aware?

You're going to have to convince the HMRC of that. I'm not saying it's impossible, but it's an uphill battle.

 

[CyprusLawyer101]

There is nothing wrong to repay a loan with an asset, provided there is an agreement between lender and borrower for such repayment.
The tax treatment of such an arrangement may raise some questioning, but overall this is perfectly legal.

 

[UAETrader454]

If you relocate to Dubai and don't plan to come back any time soon I would simple sign off as an director and let the company go, don't do any accounting and for sure no annual report, so they will sooner or later dissolve the company and you are good to go.

Even if the company has debts? the company took out a bounce back loan, this is the only debt it has.
I do plan on leaving for good in January, I was under the impression the director can be fined etc for not filing returns.
And wouldn't I still be personally liable for the loan I took from the company?

In that case, you need to seek legal advice as to whether an NFT is considered an asset in this particular case.


You're going to have to convince the HMRC of that. I'm not saying it's impossible, but it's an uphill battle.

How would they even know? on the balance sheet the loan would be repaid, I mean couldn't I even just not report the loan as its now paid back in full and irrelevant?

 

[Sols]

How would they even know? on the balance sheet the loan would be repaid, I mean couldn't I even just not report the loan as its now paid back in full and irrelevant?

Sure, go ahead. See what happens. Maybe nothing happens. Maybe you're singled out for an audit (extremely unlikely).

But now you're asking a very different type of question. Now you're not asking if it's legal. Now you're asking if you can get away with it.